Between 2006 and 2020, the world is expected to reach a peak in oil production where world demand for oil resources will be greater than the world's available oil supplies. Learn about oil and natural gas depletion and what that means for the global economy and our way of life in the United States.

Monday, January 30, 2006

Energy Crisis for Humanity?

Fossil fuels have been the cheapest and most convenient so far.It is perhaps too early to talk of an energy “crisis“. But take your pick from terms like “serious concern“ and “major issue“ and you will not be far from the positions which analysts are increasingly adopting. The reason for their concern can be found in a set of factors which are pulling in glaringly different directions:

* Demand for energy, in all its forms, is rising* Supplies of key fuels--notably oil and gas--show signs of decline* Mainstream climate science suggests that reducing greenhouse gas emissions within two decades would be a prudent thing to do* Meanwhile the Earth’s population continues to rise, with the majority of its six billion people hankering after a richer lifestyle--which means a greater consumption of energy.

Underlying the growing concern is the relentless pursuit of economic growth, which historically has been tied to energy consumption as closely as a horse is tethered to its cart. It is a vehicle which cannot continue to speed up indefinitely; it must at some point hit a barrier, of finite supply, unfeasibly high prices or abrupt climate change. The immediate question is whether the crash comes soon, or whether humanity has time to plan a comfortable way out. Even if it can, the planning is not necessarily going to be easy, or result in cheap solutions. Every energy source has its downside; there is no free lunch, wherever you look on the menu, bbc.co.uk reported.

Runaway HorseThe International Energy Agency (IEA) predicts a rise in global energy demand of 50-60% by 2030. If all else remained equal, that rising demand would be accommodated principally by fossil fuels, which have generally been the cheapest and most convenient available. But oil supplies show signs of running down; this, combined with concerns about rising demand and political instability, conspired to force prices up from $40 a barrel at the beginning of 2005 to $60 at its close. There is more oil out there, for sure; but the size of proven reserves is uncertain, with oil-producing countries and companies prone to exaggerate the size of their stocks. Currently uneconomic sources such as tar sands could be exploited; but at what cost?

Natural gas stocks--in recent times the fuel of choice for electricity generation are also showing signs of depletion, and there is growing concern in Western capitals about the political instability associated with oil and gas supplies from the Middle East and Russia. Coal, the fuel of the industrial revolution, remains relatively abundant; but here the climate issue raises its provocative head most volubly, because of all fuels, coal produces more greenhouse gas emissions for the energy it gives. Based partly on the predicted availability of cheap coal, the IEA forecasts a 50% rise in greenhouse gas emissions by 2030. Mainstream climate science, meanwhile, indicates that to avoid dangerous consequences of climate change, emissions should fall, not rise, by 50%. The economic and environmental horses are clearly pulling in mutually incompatible directions.

No Climate CurbsIt is a rare human that dons a hair shirt voluntarily; and in seeking to deal with climate change, we are, it seems, behaving to type. It took the world’s most comfortably-off nations more than seven years to bring the Kyoto Protocol into force following its signing in 1997. An alternative “climate pact“, the Asia-Pacific Partnership on Clean Development and Climate, emerged last year contending that technology alone would solve global warming. It recently concluded its first ministerial meeting by endorsing projections that under its aegis, emissions will at least double by 2050; economic growth is sacrosanct, and so consumption of coal and other fossil fuels must also continue to rise. Concern over climate change, then, is not on a global basis proving to be a driver for clean technology or for reducing demand for energy.

Price BarriersRising prices or simply constraints on supplies of fossil fuels could, however, bring other fuels into the equation; and nuclear fission is at the head of the queue. According to the World Nuclear Association, there are now about 440 commercial reactors in the world, providing 16% of its electricity; for major developing countries such as India and China, nuclear power remains both a significant part of the electricity mix and a close companion to military programs. But concerns over waste have set other countries such as Germany on a determinedly non-nuclear path. Waste apart, nuclear faces another potential obstacle; stocks of uranium are finite.